PORTLAND, Ore. -- As a teenager living under Jim Crow laws in the 1940s, Paul Knauls Sr. rode a bus 37 miles round-trip from his small Arkansas town to reach a school that served African-Americans.

After graduating high school in 1949, he was part of the group of black servicemen who integrated Fairchild Air Force Base in Spokane, Washington. As a budding Portland entrepreneur in the 1960s, he risked his savings to buy a nightclub in the section of North/Northeast formerly known as Albina, the part of town where white realtors and property owners pushed blacks to live and own businesses.

Knauls struggled against racism throughout his life. And, in some senses, he won.

He became a successful business and property owner, prospering financially and creating beloved places for Portland’s black community. He clung to his stake in North/Northeast, as the once-disinvested area was transformed, to the disadvantage of many residents, by urban renewal, then gentrification.

Knauls, 86, still lives on Northeast Bryant Street in the house that his second wife, Geneva, bought in 1965 for $28,000. It’s now worth more than $400,000. He still greets customers at the hair salon he named for Geneva on Northeast Martin Luther King Jr. Boulevard. His son, Paul Knauls Jr., 64, manages the operation.

But Knauls also lost.

Many of his black neighbors, and most of the black-owned businesses that used to crowd commercial streets such as North Williams Avenue and Alberta Street, are gone. They’ve been replaced by a new landscape of gleaming condos, yoga studios and cafes owned and occupied, almost entirely, by white people.

Even Knauls’ son has been priced out of the neighborhood. He rents an apartment in Vancouver, Washington, for $900, about half what he’d pay for a similar place in inner North/Northeast Portland. Recently, on his highway commute to Geneva’s, he missed his usual off-ramp and found himself on an unrecognizable street as he made his way north to the salon.

“After what I saw, I never want to go to Williams Avenue again,” Knauls Jr. says. “I used to know every business owner on that street. They’d say, ‘How ya doing, Paul,’ as I’d walk in the door … It was my culture.”

Now, he says, “You feel like a stranger in your house.”

This story, part of an Open: Housing series exploring rising barriers to homeownership in Portland, looks at historic and current forces affecting the city’s African-American residents, and what they likely mean for the future.

How market forces and bias displaced African Americans in Portland

Exclusion drives displacement

As wages fail to keep pace with rising housing costs, low-income Portlanders of all backgrounds are being pushed out of desirable close-in neighborhoods where they could have afforded to live five or 10 years ago. The generic term for that population movement is “displacement.” But that term doesn’t describe the experience of the more than 10,000 African-American residents who left North/Northeast Portland over the past three decades.

Portland’s black community never had a stable home — kicked from west side to east side, squeezed and torn apart by urban renewal — but since the late 1800s, it always existed somewhere. Not anymore. The recent scattering of black residents to distant parts of the city and suburbs, which reduced North/Northeast Portland’s black population by roughly half since 1990, is a “diaspora,” a population movement that disintegrates an entire cultural community.

Recently, the population of homeless African-Americans in Multnomah County has spiked, growing by 48 percent from 2013 to 2015. African-Americans represented 24 percent of the county’s estimated homeless population in 2015, yet made up only 7 percent of the county’s population. (Results from the county’s 2017 biennial homeless street count are anticipated to be released in mid-June).

While the disparate impact of Portland’s housing crisis on African-American residents gets scant attention, the causes of the black community’s high vulnerability to displacement and homelessness are discussed even less.

Low incomes are one factor: The median income for black households in Portland is roughly $27,000 (compared to $57,000 for white households); a median-priced two-bedroom apartment in North Portland’s Interstate Corridor would eat up nearly 80 percent of those funds each month.

But local and national experts who study race, poverty and housing insecurity point to another probable source of the problem: a yawning racial wealth gap created, in large part, by a history of policies and practices that have systematically excluded African-Americans from opportunities to own homes.

That wealth gap, originating in the slavery era, has widened dramatically in the past 30-plus years. One landmark study, which tracked 75,000 American households over three decades, found that the average net assets of black families rose from less than $10,000 in 1984 to $14,500 in 2013. White families’ wealth, during that same time, rose from $84,000 to $260,000.

Homeownership is the vehicle through which most American families build financial assets and pass them down to their children; low homeownership rates are both cause and consequence of black Americans’ low net worth.

While little data exists to directly compare the wealth of blacks and whites in Portland, 2015 American Community Survey results show a stark racial imbalance in homeownership rates: The estimated homeownership rate for African-American-headed households is 27 percent, slightly less than half that of white-headed households.

What’s more, the estimated homeownership rate for Portland’s black households dropped sharply, by more than 10 percentage points, from 2000 to 2015.

Chapter 2

A history of discrimination

Last month a group of about 50 passengers, employees of two nonprofit agencies and their guests, gathered in a parking lot near Benson High School in Northeast Portland. Posted at the front of a waiting bus, Fair Housing Council of Oregon Executive Director Allan Lazo promised riders a virtual journey through the “lowlights” of the region’s racial past. Offered four times a month in April through October, the council’s “Tour of Portland’s Hidden Discriminatory History” — wryly referred to by Lazo as the “Tragical History Tour” — is booked out for two years.

As the 45-foot Blue Star bus rolled up North Williams Avenue, Lazo passed back copies of a typical restrictive covenant attached to a home in a white neighborhood in Washington County, noting that similar covenants applied to many homes in Portland. Dated 1948, the covenant forbade “persons of any race other than the Caucasian race” to use or occupy homes in the neighborhood. African-Americans were permitted to live and own homes in areas such as Albina, but they couldn’t count on the city to invest in infrastructure or enforce building codes in those areas, Lazo said.

Legacy Emanuel Medical Center came into view on the left. Lazo described how in the early 1970s hospital officials and city leaders planned an expansion of the hospital campus behind closed doors, then gave residents in the targeted area, primarily African-Americans, 90 days to leave, using eminent domain to seize properties when necessary. It was the third time in less than 20 years that a major public condemnation project had torn up large sections of Portland’s black community.

Further north, the tour stopped at the former site of the city of Vanport, a World War II shipyard workers’ community built along the Columbia Slough. There, retired Metro Councilor Ed Washington recounted his family’s difficulties finding a place to live after a flood destroyed their home, and those of 18,000 other Vanport residents, in 1948.

About 6,000 of the flood refugees were, like Washington’s family, African-Americans—triple Portland’s black population in 1940. Many were stuck in Vanport after war’s end because of housing discrimination and overcrowding in Portland; reluctantly, room was found in Albina.

The four-hour tour crossed the city, revisiting tragic chapters in the lives of the region’s Chinese, Japanese, Mexican and Romani communities: internments, killings, roustings, removals, exclusions, mob attacks and one massacre. Near the tour’s end, Lazo returned to the topic of housing discrimination and wealth.

Exclusionary housing policies and practices on both local and federal levels have led to the alarming disparities in wealth we see today, Lazo explained.

“The wealth gap between whites and communities of color is rooted in a history of systemic and institutional housing discrimination, and in the inability of those communities to build wealth through homeownership,” Lazo said.

Chapter 3

An escalating racial wealth gap

National authorities echo Lazo’s diagnosis. Last month Matthew Desmond, in a New York Times magazine article, and Richard Rothstein, in a widely reviewed new book, pointed fingers at government housing policies that, over the past century, have helped wealthier whites build assets and housing security, but have worked to the disadvantage of poorer communities of color.

Thomas Shapiro, an expert on the effects of homeownership on building personal wealth and escaping poverty, recently told the Open Housing Journalism Collaborative that 20th-century social welfare reforms such as Social Security, federal housing programs and the GI Bill, which lifted up millions of poorer whites into the middle class, largely excluded people of color.

The jewel of President Franklin Roosevelt’s New Deal accomplishments, the Social Security Act of 1935, denied coverage to farm laborers, Pullman porters and domestics, who were overwhelmingly Latinos and African-Americans. Most historians believe that FDR made those compromises to ensure Southern senators’ support for the law’s passage.

“That was a massive act of exclusion that prevented a whole generation of Latinos and blacks from accessing retirement security, disability coverage and all of the things Social Security helps cover,” says Shapiro, professor of social work and policy at Brandeis University.

Similarly, Federal Housing Administration (FHA) loans were indispensable in helping millions of whites finance their first homes, starting in 1934. But these loans did little for African-Americans, who generally lived in low-income neighborhoods where FHA wouldn't lend.

The GI Bill has been a godsend for veterans, from World War II through the Iraq War, who used the public benefit to make down payments on homes and help pay for college. But whites gained disproportionately, as many black veterans, disadvantaged by segregation in housing and schools, were denied access to home loans and refused entry to college. (The high school graduation rate for black males is only 47 percent compared to 75 percent for white males, according to the Council for State Governments.)

Home sellers and real estate agents practiced blatant bigotry, refusing to sell homes to buyers solely because of their race and ethnicity, until the federal Fair Housing Act of 1968 outlawed such actions. The act was an imperfect piece of legislation, but it did curtail some of the excesses of housing discrimination, and in the three decades after it passed, black homeownership rose by almost 6 percentage points, from 41 percent to 47 percent (while white ownership jumped 6 percentage points, from 66 percent to 72 percent), according to U.S. Census records.

But from 2000 to 2015, that gain was erased as forces within and beyond the housing market aligned to shrink the black homeownership rate back to 41 percent. Many black homeowners bought homes during the peak of the housing bubble, before the Great Recession began in 2007, often accepting subprime loans allowed by lax federal regulations, according to the Urban Institute, a research organization in Washington, D.C.

In Portland over the same period, white homeownership held steady, while black homeownership fell by more than one-quarter, from 37.7 percent to 27.1 percent. (Local black homeownership estimates have a high margin of error, about 5%.)

Longtime black homeowners were among those who fell prey to “lending products that were like ant traps,” explains Cheryl Chandler-Roberts, executive director of Portland’s African-American Alliance for Homeownership.

Referring to the loss of black wealth that followed the crash, she says, “It’s kind of like we’re back to square one.”

Chapter 4

No shelter from the storm

Chandler-Roberts refuses to look back or to bemoan the present. Homeownership classes at her agency are full, and though she is sending clients as far as Estacada to find affordable $300,000 homes for sale, the number making successful purchases has increased in recent years, she says. “People are tired of being shifted around and left out; they’re tired of renting. People are waking up and saying, ‘I want ownership,” Chandler-Roberts says.

Still, Portland’s current generation of prospective first-time black home buyers face high barriers. Saving $30,000—a 10 percent down payment on a $300,000 house—is difficult on a $27,000 income. And given low levels of family wealth, black buyers are far less likely than white counterparts to get down-payment help from their parents, or to bid competitively in a local market where more than 30 percent of home sales were all-cash transactions in 2016. Even black homeowners who accumulated equity from rising property values in North/Northeast, like Knauls Sr., aren’t necessarily in a financial position to help their children buy homes, and weather the storm of gentrification.

“If you’re 80 years old, the sale of a $400,000 house, typically divided up between two or three adult kids, will leave money for the parents' long-term health care, and some money for the kids, but not money for the kids to buy their own homes,” Chandler-Roberts says.

Take a group of people who have been systematically denied wealth-building opportunities for generations, add low, stagnating incomes, throw in a subprime mortgage disaster, spiraling housing costs and wholesale community displacement, and you have a recipe for a severe economic backslide, close observers say.

Maxine Fitzpatrick is director of the Portland Community Reinvestments Initiatives. Photo by Jaime Valdez, Portland Tribune

Maxine Fitzpatrick has worked to advance housing and economic opportunities for residents of North and Northeast Portland as executive director of Portland Community Reinvestment Initiatives since 1993. In her office on Northeast Martin Luther King Jr. Boulevard, she gestures at maps showing the demographic transformation that has occurred around her.

“This loss of wealth and stability makes us the first generation of African-Americans since Reconstruction to have lost ground,” Fitzpatrick says.

“It seems like we’re going backwards,” Chandler-Roberts acknowledges, quickly adding, “There is no African-American community in Portland at this point. It’s a scattered community.”

Chapter 5

I’d rather live here

Paul Knauls Jr., is now a renter and resident of Vancouver, and he feels a lost sense of ownership toward North/Northeast Portland.

Some of the white newcomers could be a little more sensitive to the black culture they have displaced, he says. As an example, he cites the annual Naked Bike Ride that traverses past black churches and homes.

“When they could easily route it away from family neighborhoods, and don’t, that shows a lack of class,” he says.

Knauls sees the effects of Portland’s black diaspora at Geneva’s. Many longtime customers who’ve moved away drive in from Gresham and Beaverton, but if the weather’s bad, they might not make it.

“A lot of our older customers are cut off,” he says. “It’s harder when you’re old to make new friends, engage a new community, much less have the energy to start a new business.”

Sure, he concludes, the new, whiter culture has brought some hip businesses to North Williams Avenue. “But I can go to other parts of town if I want something hip,” Knauls Jr. says. “I’d rather live here.”